Friday, May 11, 2007

It's obvious Charlotte-Mecklenburg isn't the only place slammed by growth that's outpacing its ability -- or at least its willingness to raise property taxes enough -- to pay for building the schools needed for all the newcomers.

A total of 46 -- FORTY SIX -- bills in the General Assembly would give local governments across the state new authority to levy taxes beyond property taxes. Other places want permission to enact land transfer taxes, which adds a fee to real estate transactions. Or they want permission to levy impact fees on new residential construction. Or they want permission to raise sales taxes to help pay for building schools.

WakeUp Wake County, a group that advocates more limits on growth, recently hired a well-known lobbyist to push a fee of up to 1 percent on real estate transfers. At least three Wake County legislators have sponsored bills to let Wake enact some new taxes, if voters approve.

What's Mecklenburg County asking for? Nada. Zip. Zilcheroonie. (OK, to be fair, I think they passed a resolution supporting an N.C. Association of County Commissioners' attempt to get broad permission for all counties. But that bill's going nowhere, and other counties have been far more assertive about asking the Leg for what they need.)

What's Charlotte asking for? Nada. (Nope, the city doesn't pay for schools. It does pay for road and street improvements made necessary by new development. Why not ask for an impact fee for street improvements?)

Here's a roundup story from the Raleigh News & Observer. It mentions the massive campaign being sponsored by the N.C. Association of Realtors, to "Stop the N.C. Home Tax."

How disingenuous. Let's see. Right now, school construction is paid for mostly through bonds or other debt, which is repaid with, hmmmm, let me get this right -- property taxes. So a real estate transfer tax -- which would apply to every transaction, not just homes -- is a "Home Tax." And the tax you pay because you own your home is NOT a "Home Tax"?

The thing is, when you ask representatives of the N.C. Association of Realtors, "Well, how do you propose that counties find money to build schools? Shall we infer that this means you support raising property taxes?" they just hem and haw.

Or, they say, governments should trim their budgets. Oh, for pity's sakes. That's like saying Americans should exercise more and watch less TV and parents should teach their kids better manners. In other words, yes they should, but they haven't done it yet and are most unlikely to do it in the future, because there's no way to make them.

Furthermore, I don't think county governments can cut enough to find the billions needed to build the schools they need. What are they going to do, stop paying for social services that they're legally required to provide? Stop running public health departments? People who say "just cut the budget" either don't know much about local government budgets or are among the tiny minority who believe that virtually no government services are really needed. And the majority of voters don't agree with them. Which is why it's hard for elected officials to cut services enough to find the money to build schools.

Why are Mecklenburg's local officials so much more passive about proposing impact fees or land transfer taxes than those in Wake? Any ideas?

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comments:

Anonymous
said...

Mary,Please don't tell me you really think this way- "Or, they say, governments should trim their budgets. Oh, for pity's sakes. That's like saying Americans should exercise more and watch less TV and parents should teach their kids better manners. In other words, yes they should, but they haven't done it yet and are most unlikely to do it in the future, because there's no way to make them."

Using the same logic with teaching kids life's lessons- Do you propose parents should teach them to just give up when things get tough?

Budget cuts are tough. But if you analyze what is truely "needed" and what is "wanted", there is plenty of taxes to provide for everything.

Well, they could stop funding the LTR program to the tune of $9.0 billion dollars. That would be a start.

How about making CATS riders pay more than 14% for the cost of their ride?

How about the $50 MM in local revenues spent on LTR instead of public safety or other mandated services?

How about the $8 MM given away to developers for the social engineering (ie: "affordable housing") of the Scaleybark transit stop?

How about the $500,000 we subsidized to a billionare basketball team owner for police/security when the Bobcats opened?

How about that cool $1.0 MM that the Whitewater Park just flushed down the drain (...or down river) because they are WAY over budget (GASP!)??

How about that $180,000 that CATS blew on refurbishment of trolley cars that CANNOT be used on the LTR tracks due to safety reasons?

How about the CATS leasing debacle that forced the city into office leases in order to avoid worse penalty clauses.

Sorry Mary...local governments are not living on shoe string budgets. I provided the above examples in the few minutes it took to write this. Let's try living within our means instead of plucking the golden goose at every turn. The average citizen lives within their means, why not our government?

Leave it to the liberal tax and spenders to think: If we can tax them once, why not twice??

Mary contends that the real estate transfer tax is a home tax that's no different than my property taxes. What's the difference? Quit complaining, shut-up and pay up.

Well, the difference is the potential for a taxation double dip on private property by a greedy government.

Let's assume I am the model of an upstanding citizen who is fully paid on my property taxes by the 1st half of the year. Then I decide to sell my house at the end of the year. I get the "benefit" of paying my full property tax load AND my transfer tax. The only way to minimize the double money grab from your wallet is to sell as early as possible in the year.

So Mary, it's not quite as simple as you make it sound. It's a tax double dip plain and simple. But I doubt that will slow down the tax and spend crowd since they believe they have a "right" to my money and property.

Well Mary I would say that our local pols think going to Raleigh is just too hard.

Mr McCrory says that repeatedly when talking about the inability of CharMeck to go back to Raleigh if the 1/2 cent transit tax is repealed. He implied that at a recent city council meeting when speaking with the City Attorney. He acted like it wasn't possible to ask for a 1/4 cent specifically directed at buses. Going to Raleigh is just too hard.

Why would asking for any other tax for any other reason be any easier?

Charlotte Pols do lack guts, and this goes back to the original "non-binding referendum" that was the initial attempt to build an arena.

That issue was so tied to the hatred for George Shinn that the politicians thought that if they tied it into a broader package that it would soften the view that Shinn was getting a new arena.

That was a gutless move to be sure.

The ensuing defeat led to George pulling up roots and moving to New Orleans. Great move George!

The NBA then demanded a new arena, and the justification was made and we now have it.

Many still say that was a slap in the face of the voters, but had George Shinn not been involved, it would have passed.

Our elected officials need to have one foot in today, and one 10 years away. They need to interpret trends and make decisions based on them, and not be stuck in the past.

Ask any of the northern cities if they would like to be on the receiving end of 50,000 plus residents a year going forward.

Infrastructure is something that is governments responsiblity. Sewers, Water, Roads, Police, Postal Services, Schools, Parks, etc. When the demand goes up, it must be met. How to pay for it? Much of it is one time costs, the installation.

I don't know the best way to pay for it, but it will involve taxation. I believe I favor impact fees, but then again, I am a supporter of infill, which makes use of existing infrastructure. Impact fees will not cover all needed infrastructure though.

Concerning government waste, there is no government that is immune to waste, not one. If Lewis's perfect world were to exist, it too would contain waste. As long as there are people involved, there will be waste.

We can't ignore it, but we can't spite ourselves either.

Back to the Pols.

We are involved in a time where business growth is tied to govenrment subsidies, see the Dell or Google deal to name a few. These companies could go anywhere, and seek the best deal, they owe that to their shareholders, you and me.

Going down to the local level, that still exists. The arena was one, NASCAR HOF another, the Mint Arts package yet another, and the coming Knights Stadium a fourth just to name the most obvious.

The growth around the Bobcats Arena is certainly justifying that building, and when the team gets competetive, it will explode!

The NASCAR project is kick starting the Second Ward, and will include an office tower that is not subsidized at all.

While the Mint project is years away, you can feel the success already building in that area of the city with the One Charlotte 40 story condo project a recent announcement along with the potential of a Trump project attached to it.

The whole baseball issue, and the redesigned park had it's inception 6 years ago with a study from CIVITAS, a designer of public parks. Their conclusion was that a park tied to Tryon Street would bring the quickest economic development. With the proposed swap, there are over 1000 condo units proposed or about to be constructed around that park.

Total outlay of govenrment money here is around $600 million, total private investment around these examples is well over a Billion, and will continue to contribute to the tax base forever far in excess of the taxes those parking lots produced.

Mary: 3 things are going to happen in the near future. 1) The 1/2 cent tax is going to be repealed. 2) The 600 million+ bond referendum will go down in flames. 3) and many former Observer writers will be learning to say "Welcome to Wal Mart" in Spanish. But not you Mary, I think you might have a future as a dining room keeper at our local Wendys.

If we need more $$$ for our beloved government, how 'bout a 25%sales tax on classified ads in newspapers with a circulation over 25,000. It's for the children, and isn't it time big media gave something back to our community

What goes around comes around. When city leaders subsidize pro athletics and in effect tax citizens to pay bloated superstar salaries to athletes, raze a coliseum a few short years after its construction, having replaced it with another loser, botch airport runway estimates, botch rail estimates, botch waterpark estimates, what do they think people are going to say about new taxes? It becomes completely feasible to believe city leaders are filling secret Bahamian bank accounts with under-the-table payoffs.

Sound like some people here would still like to be living in log cabins near dirt roads. MOVE if you don't like the Charlotte of the future. The less redneck republican naysayers, the better off this place will be.

UD mentioned that pols have to have a vision into the future (ie: 10 years and out).

Well, let me give him the future of our region 10-20 years out if we contiue to tax, spend and subsidize at our current pace.

Char-Mek will begin to resemble older Northern/Midwest municipalities with heavy tax burdens and population flight. Companies will view the area as unsustainable and will begin moving out or not relocate here at all (...which is happening NOW by the way). Do not be surprised when a BofA or a Wachovia announce a substantial work force re-allocation to low cost countries and to low cost US region (South Carolina /Missippi/Alabama).

Like Detroit, gov-co will implement a payroll tax to stem the tide of lost tax revenue due to population fight. Companies will locate from Char-Meck to adjacent counties so that they can retain employees who would otherwise leave due to the payroll tax.

UD...you're right, we need to look into the future. I grew up in the midwest (Rockford, IL) in the 1980's and watched a region go down the tubes due to economic and gov-co tax issues. I don't want to see that happen here, but we seem well on our way to this scenario in 10-20 years.

I said this a long time ago when the transit tax repeal initiative first came up.

If it is repealed it will not be because of people like me. It will be the fault of people like Ron Tober, Pam Syfert, and Pat McCrory.

The same can be said for Mary's concern over lack of effort in petitioning Raleigh over more taxes. How could they do it with a straight face with all of the following history?

If the Arena vote had been respected, people like me might approve of an infrastructure tax.

If $100+ million had not been given to the billionaire France family for the NASCAR HOF, people like me might approve of an infrastructure tax.

If students who bring guns to school were immediately expelled rather than usually being given 365 day suspensions, people like me might approve of an infrastructure tax.

If being sent to Derita once you reach highschool was a "life" sentence rather than simply a "training course" before being sent back to terrorize the good kids, people like me might approve of an infrastructure tax.

If the highly paid professionals such as Peter Gorman were listended to when making construction recommendations - 80% new constuction, 20% renovation - rather than political pandering resulting in 67% to 33%, people like me might approve of an infrastructure tax.

If Ron Tober had been fired for delaying release of cost overrun probabilities rather than being told to stay on when he reportedly offered to resign last year, people like me might approve of an infrastructure tax. (charlotte.johnlocke.org/headlines/byWeek.html?yearWeek=200638&storyType=Headlines)

Alas, that is the history the local pols - both Dem and Rep - have to live with when thinking about new taxes. With all that in mind, people like me and many who are not like me will NOT approve of an infrastructure tax.

I am more inclined to share Uncle Dennis' vision for Charlotte then some of the latter. Thank goodness we have some leaders with vision who are not going to fall hook, line and sinker with the John Locke crowd. Enough northerners and midwesterners have moved down indeed for economic reasons, but they, along with many natives, know we need to bolster infrastructure and cultural opportunities (just like 'back home') to bring the best and brightest to our city. Since taxes are STILL nothing compared many other municipalities in the country,they don't mind raising them a little to make these things happen.

As for companies moving to South Carolina, Mississippi and Alabama, if they find it in their best interest to do so, so be it. I do find it difficult to believe that many companies will have much luck recruting good employees to move to those states due to the low educational levels, high infant mortality, excessive racism and christofacism in their states' leadership, etc. But then again, if enough people move to those states, perhaps they'll demand some positive change just like we have seen here in North Carolina over the last 20 years.

As for back here, the sooner we become more like a New York, Chicago, Atlanta or Dallas the better.

First:Mary, when will the Observer start to require an online subscription and only have the front page available online? Doesn't the Observer have deep enough pockets to provide the online paper for free?

Second,

"As for companies moving to South Carolina, Mississippi and Alabama, if they find it in their best interest to do so, so be it. I do find it difficult to believe that many companies will have much luck recruting good employees to move to those states due to the low educational levels, high infant mortality, excessive racism and christofacism in their states' leadership, etc."

What the hell are you talking about? You are a bigot to label entire states that way. There is excessive racism in NYC, Atlanta and Chicago. And it goes from all races to all races.

Would you mind explaining how Rockford and Charlotte is an apples to oranges comparison, while at the same time you want Charlotte to become more like the other cities you list? Why is a comparison to Rockford invalid, but trying to emulate a city like New York (which could not be more unlike Charlotte - in good and bad ways - for a host of reasons) somehow a worthwhile objective of public policy? If we're immune to the problems of Rockford, why are the benefits of NYC achievable? How would we emulate Atlanta? Are we going to lure Coca-Cola and CNN to come here? Do these cities not also have some problems that we would be better off not emulating?

This isn't to say that Mary doesn't have a point in her initial post: there's something to the idea of making public finance more flexible and matching public burdens with benefits where possible. Of course, there is the bugbear that she herself gives away - that public officials haven't earned the confidence that they'll use such authority wisely.

There is no reason taxes need to be raised to build schools or other infrastructure.

The history of CMS is not building schools when they are needed, then renovating schools for political purposes, which are not needed.

Mary's contention we need to raise taxes is typical of someone who believes government is benevolent and means no harm.

The exact opposite is true. Government is force and many people involved mean to take from others to help themselves.

If CMS did not squander money on unneeded projects; if CMS ran a good maintenance program; if CMS built buildings which are needed, then there wouldn't be a capacity problem.

Instead we cater to George Dunlap, Vilma Leake, et al and their desire to stay in office by renovating old buildings in their districts, by which they pretend to be offering education to their constituents. They do not offer education, they offer nice buildings, which are then not maintained and Mary and Ed and Fannie cry out OOOOOHHHHHH, we need money for schools, because they, not just elected people, are the ones who are afraid to see the truth, and if they could they would be afraid to publish it for fear of George and Vilma and company.

CMS is a classic case of a bureaucracy serving itself.

Gorman is only following in Smith's footsteps. Go to CMS. Work 3 to 4 years. Pretend you care about education. Get a full retirement with bonuses. Go somewhere else and collect another.

I was a member of the CCBAC (Citizens Capital Budget Advisory Committee) for 6 years, 2 of which I was chair. I was also the president of Citizens For Effective Governemt, whose focus was often on CMS maintenance and building.

I became an expert on the issue of CMS its operational budget and capital expenditures in the county.

------------During my tenure as Chairman: At The Observer Ed Williams refused to acknowledge pieces sent to him to be published about CMS, much less publish them. (this is not to say he published nothing) Letters sent to the editor are 'edited' until they contain no information.

Mary cries out for more taxes.I ask: Where are the investigative reports about waste in CMS.

Where is honesty about CMS in the reporting and opinion writing at the Observer?

Wow... I came kind of late to this conversation, but it turns out I almost don't need to say anything. Mary and those like her have been raked over the coals sufficiently well.

One point I will add: If population growth causes a need for more schools, and population growth depends on new housing being built, then the solution is obvious: Impact fees on ALL new residential development, to be used ONLY and SPECIFICALLY for the construction (NOT renovation) of new schools in the vicinity of the new development.

Yes, this will slow down growth. But as I've said repeatedly and often, we could stand to slow our rate of growth a bit.

Our Charlotte pols do lack guts. They also lack fiscal responsibility and accountability for their moronic actions in the past, and I've had all I can stand from them.

Citizens For Effective Government are nothing but a munch of baffoons who want to micromanage how the city, county and schools do things and keep this city in the big dumb south mentality. The Observer, and everyone else with and working brain cells is right to laugh off anything these fools say. Just like those who want to slow growth are only afriad of more new people coming into town with new ideas and killing off even more of the backwood ways of doing things around here.

"a munch of baffoons" Pardon me while I stop laughing. And you have the nerve to discuss "working brain cells." P.S.: it would be "a bunch of buffoons." Stop typing in such an angry mode and perhaps your thoughts might be a bit more intelligible.

No kidding? People on this blog are actually comparing Charlotte to Rockford, Illinois? Come on. According to the Census, Rockford has grown to 153,000 from 139,000 in 1990 compared to Charlotte's population of 650,000 ...and that's just within the city limits. Better to look ahead at larger cities that are growing well and learn what they are doing right ...and wrong. Let's start by examining cities such as Portland, Oregon and Austin, Texas. Then using those lessons work to make Charlotte the best Charlotte that it can be.

Why some people, usually newcomers, denigrate those who have been in the Charlotte area for decades as being backwards etc, when it is those same people who made Charlotte big enough and vibrant enough to attract the newcomers is beyond me. Those making the rude comments should actually write something constructive, which they otherwise seem incapable of doing, thus solidifying a derogatory opinion of their intellingence, or lack thereof.

Lewis, we are not knocking the natives who had the vision of making Charlotte bigger and better, only those who balk at progress and keep trying to revive the civil war and keep Charlotte in the '50's. Those are who we are calling backwoods, becasue, for the most part, they are.

Mary - your idiotic comment about "for pity's sakes" shows that you're totally in the tank for the uptown ghouls. You're a sickening communist and the best thing to happen to Charlotte would be for the next Cho Seung-Hui to do his thang at 600 S. Tryon.

Mary, I think your take on government spending ("yes they should, but they haven't done it yet and are most unlikely to do it in the future, because there's no way to make them") is absolutely super! Why not apply it to pedophiles, rapists, murderers and drunk drivers too?

Mary,It starts with a lack of vision... plus another part fear (we DO have loud mouth opposition, led by the old timers)and finally the courage and will that comes from a vision for the future.

So true about the Realtors and Home tax-- disingenuos and in lockstep with the builders.

And to the oppositon- here is your new reality check, there are going to be more schoools built, more roads and Light Rail. An we need them all, and yes you, like all of us will be asked to pay your fair share. Like "Good Bushies" in Washington, your time has passed.

And this Realtor believes those who benefit the most from this growth-- builders and appreciating landowners- should pay more.

Please tell me if this is possible, but I'm pretty sure that something like it would be.

Large corporations will likely avoid this tax by making wholely owned subsidiaries out of large commercial real estate holdings. These subsidiary corporations will actually own the property.

When the property is sold it will not be sold by the subsidiary. Instead, the subsidiary itself will be sold. Ownership of the real estate will not change, just ownership of the holding company. No tax will be paid.

Now, of course the politicians could close this loophole somehow, but since corporations buy and sell politicians on a daily basis, that probably won't occur.

Do you think the average home owner will be able to do the same thing?

Thus the term Home Tax.

There are always tax loopholes that corporations can use that the average citizen can not. Why would this be any different?

I'm no tax lawyer or real estate expert such as yourself, but if this type of loophole is obvious to me, then it will be even more obvious to someone paid to figure it out.

About Mary and The Naked City blog

Mary Newsom is an Observer associate editor and op-ed columnist who's been covering growth, neighborhoods, urban design, sustainable development and related topics since 1995. In "The Naked City" you'll read her take on those topics and others.